Appraised Value
An evaluation of a property's value based on a given point in time that is performed by a professional appraiser during the mortgage origination process. The appraiser is usually chosen by the lender, but the appraisal is paid for by the borrower. Investopedia Says:
The appraised value of a home is an important factor in the loan underwriting process and plays a role in determining how much money may be borrowed and under what terms. For example, the loan to value (LTV) ratio is based on the appraised value.
In general, if the LTV is greater than 80%, the lender will require the borrower to buy private mortgage insurance. However, if the LTV drops to 78% upon a new appraisal, private mortgage insurance payments may be eliminated. Related Terms:
Appraisal
Closing Costs
Loan To Value Ratio - LTV Ratio
Mortgage Originator
Private Mortgage Insurance - PMI |